MIAMI--(EON: Enhanced Online News)--Hemisphere Media Group, Inc. (NASDAQ:HMTV) (“Hemisphere” or the
“Company”), the only publicly traded pure-play U.S. media company
targeting the high growth U.S. Hispanic and Latin American markets with
leading broadcast and cable television and digital content platforms,
today announced financial results for the second quarter ended June 30,
2017.

“We continued to execute against our long-term business strategy during
the second quarter”

“We continued to execute against our long-term business strategy during
the second quarter,” said Alan Sokol, President and Chief Executive
Officer of Hemisphere. “A strong nine percent increase in subscriber and
retransmission fees was partially offset by lower advertising revenue,
primarily due to weakness in the Puerto Rico market. Nonetheless, for
the first half of 2017, our Puerto Rico advertising revenue actually
increased over 2016, excluding political. Importantly, we have made
great progress in our strategic growth initiatives. In Colombia, we are
excited about our full relaunch of Canal Uno on August 14, 2017.
PANTAYA, our joint venture with Lionsgate launched on August 1, 2017 and
features exclusive access to the largest and most diverse selection of
Spanish-language blockbusters and critically acclaimed films from Latin
America and Hollywood. These, as well as our recent investment in
REMEZCLA, significantly expand our offerings, broaden our audience, and
ultimately position us to define the future of the Hispanic video
content landscape.”

Financial Results for the Three and Six Months Ended June 30, 2017

Net revenues were $35.2 million for the three months ended June 30,
2017, a modest increase as compared to net revenues of $35.0 million for
the comparable period in 2016. Net revenues were $68.3 million for the
six months ended June 30, 2017, an increase of 4%, as compared to net
revenues of $66.0 million for the comparable period in 2016. The
increases in both the three and six month periods were due to growth in
subscriber and retransmission fees and other revenue, offset by a
decline in advertising revenue. Subscriber and retransmission fees
across all of the Company’s channels grew 9% in both the three and six
month periods ended June 30, 2017, driven by annual rate increases,
subscriber growth and new launches. Advertising revenue decreased $2.1
million and $1.4 million, or 12% and 5%, in the three and six months
ended June 30, 2017, respectively, due to political advertising in 2016
and softness in the Puerto Rico advertising market and the direct
response advertising market in the U.S., which impacted the Company’s
U.S. cable networks. Other revenue, which is primarily related to the
licensing of content, grew $0.6 million and $0.5 million in the three
and six months ended June 30, 2017, respectively. The increases are due
to the timing and availability of content that the Company has licensed
to third parties. Excluding political advertising revenue in the prior
year periods, net revenue in the three and six months ended June 30,
2017 increased $0.9 million and $3.1 million, or 2% and 5%, respectively.

Operating expenses were $24.7 million for the three months ended June
30, 2017, an increase of 1%, as compared to operating expenses of $24.4
million for the comparable period in 2016. Operating expenses for the
six months ended June 30, 2017 were $50.8 million, an increase of 5%, as
compared to $48.2 million for the comparable period in 2016. The
increases in the three and six months ended June 30, 2017 were driven by
increases in transaction costs related to the Company’s strategic
investment activity and higher stock-based compensation. The increase in
the six months ended June 30, 2017 was also attributable to costs
incurred in connection with the amendment of the Company’s term loan.
The increases in operating expenses for the three and six months ended
June 30, 2017 were partially offset by reduced news and programming
costs.

Net income was $5.2 million for the three months ended June 30, 2017, an
increase of 3%, as compared to $5.0 million in the comparable period in
2016. Net income for the six months ended June 30, 2017 was $7.9
million, an increase of 3%, as compared to $7.7 million in the
comparable period in 2016.

Adjusted EBITDA was $16.1 million for the three months ended June 30,
2017, an increase of 4%, as compared to Adjusted EBITDA of $15.5 million
for the comparable period in 2016. Adjusted EBITDA for the six months
ended June 30, 2017 was $30.6 million, an increase of 6%, as compared to
Adjusted EBITDA of $28.8 million for the comparable period in 2016.
Adjusted EBITDA, excluding political revenue for the three and six
months ended June 30, 2017, increased $1.4 million, and $2.6 million,
respectively, or 9%, in each period.

The Company affirms its forecast of mid to high single digit percentage
increase in Adjusted EBITDA for 2017, excluding political revenue in
2016. The forecast does not include the Company’s attributable interests
in its equity investments. The Company expects its funding requirements
for its strategic initiatives including, Canal Uno, PANTAYA and REMEZCLA
will be $35 to $40 million in the aggregate for the year ending December
31, 2017. The Company’s previous guidance of $30-35 million did not
include its investment in REMEZCLA made during the second quarter.

As of June 30, 2017, the Company had $212.3 million in debt and $155.5
million of cash. The Company’s leverage ratio was approximately 3.2
times, and net leverage ratio was approximately 0.9 times.

1 See the Non-GAAP Reconciliations section of this earnings
release for a discussion of non-GAAP financial measures used in this
release.

The following tables set forth the Company’s financial performance for
the three and six months ended June 30, 2017 and 2016, as well as select
financial data as of June 30, 2017 and December 31, 2016:

HEMISPHERE MEDIA GROUP, INC.

Comparison of Consolidated Operating Results

(amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

(Unaudited)

(Unaudited)

Net revenues

$

35,180

$

35,031

$

68,339

$

66,002

Operating Expenses:

Cost of revenues

10,298

10,638

20,543

20,821

Selling, general and administrative

9,843

9,520

19,335

18,776

Depreciation and amortization

4,067

4,061

8,182

8,417

Other expenses

474

119

2,724

132

Loss on disposition of assets

2

16

2

15

Total operating expenses

24,684

24,354

50,786

48,161

Operating income

10,496

10,677

17,553

17,841

Other Expenses:

Interest expense, net

(2,598

)

(2,869

)

(5,226

)

(5,825

)

Other income, net

121

-

121

-

Total other expenses

(2,477

)

(2,869

)

(5,105

)

(5,825

)

Income before income taxes

8,019

7,808

12,448

12,016

Income tax expense

(2,838

)

(2,779

)

(4,522

)

(4,287

)

Net income

$

5,181

$

5,029

$

7,926

$

7,729

Reconciliation of net income to Adjusted EBITDA:

Net income

$

5,181

$

5,029

$

7,926

$

7,729

Add (deduct):

Income tax expense

2,838

2,779

4,522

4,287

Other income, net

(121

)

-

(121

)

-

Interest expense, net

2,598

2,869

5,226

5,825

Loss on disposition of assets

2

16

2

15

Depreciation and amortization

4,067

4,061

8,182

8,417

Stock-based compensation

1,052

589

2,122

1,989

Transaction & non-recurring expenses

502

119

2,780

522

Adjusted EBITDA

$

16,119

$

15,462

$

30,639

$

28,784

Selected Financial Data:

(amounts in thousands)

As ofJune 30, 2017

As ofDecember 31, 2016

(Unaudited)

(Audited)

Cash

$155,520

$163,090

Debt (a)

$212,280

$213,347

Leverage ratio (b):

3.2x

3.3x

Net leverage ratio (c):

0.9x

0.8x

(a)

Represents the aggregate principal amount of the debt.

(b)

Represents gross debt divided by Adjusted EBITDA for the last twelve
months. This ratio differs from the calculation contained in the
Company's amended term loan.

(c)

Represents gross debt less cash divided by Adjusted EBITDA for the
last twelve months. This ratio differs from the calculation
contained in the Company's amended term loan.

Amounts presented are based on most recent remittances received from
the Company’s distributors as of the respective dates shown above.

(b)

The total above excludes digital basic subscribers. Subscribers to
WAPA America including digital basic subscribers decreased 1.8% from
June 30, 2016 to June 30, 2017, and decreased by 3.1% from December
31, 2016 to June 30, 2017.

Non-GAAP Reconciliations

Within Hemisphere’s second quarter 2017 press release, Hemisphere makes
reference to the non-GAAP financial measure, “Adjusted EBITDA.” Whenever
such information is presented, Hemisphere has complied with the
provisions of the rules under Regulation G and Item 2.02 of Form 8-K.
When presenting Adjusted EBITDA, Hemisphere’s management adds back
(deducts) from net income, if any, depreciation expense, amortization of
intangibles, loss (gain) on disposition of assets, transaction and
non-recurring expenses, income tax expense, interest expense and
stock-based compensation. The specific reasons why Hemisphere’s
management believes that the presentation of this non-GAAP financial
measure provides useful information to investors regarding Hemisphere’s
financial condition, results of its operations and cash flows has been
provided in the Form 8-K filed in connection with this press release. A
reconciliation of net income to Adjusted EBITDA can be found above in
the table that sets forth Hemisphere’s financial performance for the
three and six months ended June 30, 2017 and 2016.

Conference Call

Hemisphere will conduct a conference call to discuss its second quarter
results at 10:00 AM ET on Friday, August 4, 2017. A live broadcast of
the conference call will be available online via the Company's Investor
Relations website located at http://ir.hemispheretv.com/.
Alternatively, interested parties can access the conference call by
dialing (877) 497-1436, or from outside the United States at (262)
558-6292, at least five minutes prior to the scheduled start time. The
conference ID for the call is 59093954.

A replay of the call will be available beginning at approximately 1:00
PM ET on Friday, August 4, 2017 by dialing (855) 859-2056, or from
outside the United States by dialing (404) 537-3406. The conference ID
for the replay is 59093954.

Forward-Looking Statements

Statements in this press release and oral statements made from time to
time by representatives of Hemisphere may contain certain statements
about Hemisphere and its consolidated subsidiaries that are
“forward-looking statements” within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These include, but are not
limited to, statements relating to Hemisphere’s future financial and
operating results (including growth and earnings), plans, objectives,
expectations and intentions and other statements that are not historical
facts. These statements are based on the current expectations of the
management of Hemisphere and are subject to uncertainty and changes in
circumstance, which may cause actual results to differ materially from
those expressed or implied in such forward-looking statements. Without
limitation, any statements preceded or followed by or that include the
words “targets,” “plans,” “believes,” “expects,” “intends,” “will,”
“likely,” “may,” “anticipates,” “estimates,” “projects,” “should,”
“would,” “expect,” “positioned,” “strategy,” “future,” or words, phrases
or terms of similar substance or the negative thereof, are
forward-looking statements. In addition, these statements are based on a
number of assumptions that are subject to change. Factors that could
cause actual results to differ materially from those expressed or
implied by the forward-looking statements are discussed under the
headings “Risk Factors” and “Forward-Looking Statements” in Hemisphere’s
most recent Annual Report on Form 10-K, filed with the Securities and
Exchange Commission (“SEC”), as they may be updated in any future
reports filed with the SEC. If one or more of these factors materialize,
or if any underlying assumptions prove incorrect, Hemisphere’s actual
results, performance, or achievements may vary materially from any
future results, performance or achievements expressed or implied by
these forward-looking statements. Forward-looking statements included
herein are made as of the date hereof, and Hemisphere undertakes no
obligation to update publicly such statements to reflect subsequent
events or circumstances.

About Hemisphere Media Group, Inc.

Hemisphere Media Group, Inc. (NASDAQ:HMTV) is the only publicly traded
pure-play U.S. media company targeting the high growth U.S. Hispanic and
Latin American markets with leading broadcast and cable television and
digital content platforms. Headquartered in Miami, Florida, Hemisphere
owns and operates five leading U.S. Hispanic cable networks, two Latin
American cable networks, and the leading broadcast television network in
Puerto Rico, and has ownership interests in a new broadcast television
network in Colombia and a Spanish-language OTT service in the U.S.
Hemisphere’s portfolio consists of:

Cinelatino, the leading Spanish-language movie channel with over 20
million subscribers across the U.S., Latin America and Canada,
including 4.6 million subscribers in the U.S. and 16.1 million
subscribers in Latin America, featuring the largest selection of
contemporary Spanish-language blockbusters and critically-acclaimed
titles from Mexico, Latin America, Spain and the Caribbean.

WAPA, Puerto Rico’s leading broadcast television network with the
highest primetime and full day ratings in Puerto Rico. Founded in
1954, WAPA produces approximately 70 hours per week of top-rated news
and entertainment programming.

WAPA America, the leading cable network targeting Puerto Ricans and
other Caribbean Hispanics living in the U.S., featuring the
highly-rated news and entertainment programming produced by WAPA. WAPA
America is distributed in the U.S. to 5.1 million subscribers,
including digital basic subscribers.

Pasiones, dedicated to showcasing the most popular telenovelas and
serialized dramas, distributed in the U.S. and Latin America. Pasiones
has 4.6 million subscribers in the U.S. and 13.4 million subscribers
in Latin America.

Centroamerica TV, the leading network targeting Central Americans
living in the U.S., the third-largest U.S. Hispanic group, featuring
the most popular news, entertainment and soccer programming from
Central America. Centroamerica TV is distributed in the U.S. to 4.1
million subscribers.

Television Dominicana, the leading network targeting Dominicans living
in the U.S., featuring the most popular news, entertainment and
baseball programming from the Dominican Republic. Television
Dominicana is distributed in the U.S. to 3.4 million subscribers.

Canal Uno, a partnership with leading Colombian content producers, is
one of only three national broadcast television networks in Colombia.
The partnership was awarded a 10-year renewable broadcast TV
concession for Canal Uno in Colombia in 2016. The concession provides
the partnership with a rare opportunity to access one of Latin
America’s most robust and stable economies with an attractive
television advertising market. It also provides Hemisphere the
opportunity to produce high quality content which can be repurposed on
HMTV’s channels and syndicated internationally. The partnership began
operating the network on May 1, 2017.

PANTAYA, a Spanish-language over-the-top (OTT) service dedicated to
premium content for the Hispanic community in the U.S. launched August
1, 2017.

REMEZCLA, an influential digital media company targeting English
speaking and bilingual U.S. Hispanics aged 18-35 through innovative
digital content. Hemisphere’s investment is a complementary extension
of its portfolio, broadening the Company’s footprint and its reach
with the highly coveted Millennial audience.

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